Poor credit can make your life extremely difficult in multiple ways and can inhibit you from reaching your personal and financial goals. Those consumers with poor credit will end up paying more interest on loans and credit cards. Not only that, consumers with poor credit are at risk for being declined loans, credit, and rental applications. Building your score takes time but can be achieved and will be worth it. To start re-building your credit score, you need to know what your score is, understand what affects your score, and keep track of your progress. We show you how in this post.
Where does my credit score rank?
The credit score aka FICO (Fair Isaac Corp) is a numerical figure that ranges in between 300-850 and is used to determine a person’s creditworthiness. Essentially, this score ranks a person on the probability they will be able to repay.
Essentials of a credit score
- Your Payment/Billing History
- Your credit score is highly affected by your billing history. This includes your credit card bills, loans, and utility bills.
- Amounts Payable
- The categorization of your credits, and how they match up to the extent of what you’re authorized to take out.
- Years of Credit
- Since the seniority of your accounts can measure your capacity to repay, a lengthy credit history works in your favor.
- Recent Credit
- The number of accounts you’ve opened recently along with how many inquiries have been made to your credit.
- Credit Types
- The blend of accounts you have in hand including auto loans, mortgages or other credit types.
How does my credit score affect me?
Naturally, higher scores correspond to lower interest rates. Currently, credit specialists consider any figure above 720 will bring in the best interest rate for you. Although your credit score is significant, it’s important to understand that a credit score is not the only piece lenders look over to measure approvals. They also review employment history, yearly income, other debts, etc.
How to track your credit score?
Each user is designated to a free credit report issued by each of the three credit bureaus (Click AnnualCreditReport.com to check your free report).
Preferably, you should check your credit score more than once a year but pulling more than one credit report not only will cost you money, it will also affect your score. Thankfully, in this age of technology there are alternative ways to keep tabs on your score throughout the year.
One of these solutions is through Bank of America. Bank of America customers can access their TransUnion score by going to www.bankofamerica.com, signing into their account, clicking on the ‘Tools & Investing’ tab, then the ‘View Your FICO Score’ to view their score.
If you’re not a Bank of America customer, don’t worry there are other ways to track your credit without pulling a full report. The best part of these options is that your score won’t suffer from constant review.
Discover offers a Credit Scorecard for all consumers. That’s right, you don’t have to be a Discover cardholder to gain access to this amazing perk! Head to https://www.discover.com/free-credit-score/ or download the app in Apple or Android app stores to unlock your score and start using this user-friendly app, today!
Major credit cards
If you decide not to use the Discover Credit Scorecard option, there are other credit card companies that offer a credit tracking service. Not all of them require you to be a cardholder, but some do. Read on ‘These 19 card companies offer free credit score info’ to find more companies that offer this service.
Credit counseling services
Are you already working to better your credit score? Consolidating your credit can be a great first step to get a handle on past due payments or high balances. Not only that, those who are using credit counseling services are eligible to pull consumer credit reports for free.
Credit Karma app
The Credit Karma App is a great tool that you can download on your phone to track your credit score and get updates on progress or any inquiries. Available for both Apple and Android users, the app is very user-friendly. See open accounts, payment history, compilation of scores from all three credit bureaus and see how your score ranks. Not only that, Credit Karma will provide tips on improving your credit score.